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10 Essential Money-Saving Tips for College Graduates

By U.S. News & World Report

Life after graduation signals a new world of opportunity and responsibility. You’re most likely kicking off your career, moving out of campus housing and becoming financially independent. To help you take control of your finances, here are a few essential money-saving tips:

1. Start a budget. The first step to handling your money is understanding where it is coming and where it is going. Establishing — and sticking to — a monthly budget is essential for long-term financial health. Since you’re a member of the tech-savvy generation, put your smartphone to good use by downloading a free personal finance app to automatically track spending, account balances and credit on the go.

2. Understand living expenses. When you leave the comfort of campus housing, you’ll discover how quickly expenses can add up. From utilities to transportation to rent, you’ll suddenly face a lot of monthly expenses that were previously negligible or nonexistent. Make sure you consider these new expenses when setting your budget and understand how costs will vary based on service packages and time of year, allowing yourself to make smart financial decisions that best suit your needs.

3. Pay off student loans. According to a recent Edvisors study, over 70 percent of bachelor’s degree recipients will graduate with loans, and the average 2015 graduate will have more than $35,000 of student loan debt. While it’s tempting to make the minimum monthly payments, opt for as aggressive a repayment plan as possible. The sooner you pay off those loans, the less interest you pay and the sooner you will have extra money to put into saving, or plan a treat for yourself.

4. Plan for retirement. Sounds crazy, right? But even though retirement seems a long way away (you just started working!), it’s never too early to start saving. Automate your savings so that a portion of each paycheck goes directly into a savings account. If your employer offers a 401(k) and matches your contributions, take advantage of this offer. It’s basically free money.

5. Establish an emergency fund. It might not be pleasant to think about, but emergency funds are crucial protection from life’s unexpected and costly events. Whether your car breaks down, you get injured or lose your job, having this safety net will give you financial peace of mind. To establish your emergency fund, start by putting away $1,000. Then contribute spare change or a little from each paycheck until you have between three to six months of net pay. The trick here is to reserve this fund only for emergencies.

6. Pay your bills on time — every time. It is crucial to keep track of expenses and make all payments on time to avoid hefty late fees and negative impacts to your credit rating. To avoid late payments, consider scheduling automatic payments, setting calendar reminders before due dates and downloading an app like Mint Bills that aggregates all your bills in one place.

7. Establish and track credit. Building credit and a good credit score is a must, as it shows you are a responsible borrower and worthy of loans for major purchases like a home or car. To build and maintain good credit, remember a few basic rules: Keep your oldest credit card open, pay your bills on time and avoid maxing out cards.

8. Live within your means. Happy hours, lunches out and expensive exercise classes are all fun and tempting when you start receiving your first paychecks, but these daily or weekly luxuries will eat away at your budget fast. Identify a few classes, restaurants or bars you’re really eager to try, so that when you do treat yourself, you’re doing so mindfully and responsibly.

9. Be a social deal seeker. One of the best things about being fresh out of college is that most of your friends are likely in the same financial boat as you — cash-strapped and paying down debt, but free from the time and financial responsibilities of family. Keep your college crowd together and grow your new city circle of friends by planning fun, low-cost activities such as picnics, pickup games and free outdoor festivals. Also look out for activities on daily deal sites like Groupon, LivingSocial and Gilt.

10. Set a long-term goal. Budgeting does not always mean just saving; you can also budget in fun. Whether it’s a new couch, tropical vacation or dream home to own, setting a long-term goal will motivate you to stick to your budget and reward your financial responsibility.

If you don’t have the time or the money to embrace all of these tips, that’s OK. Pick one or two to get you started on your way to a prosperous postgraduate life.

More from U.S. News

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10 Retirement Savings Tips for 20-Somethings

How to Manage Your Money in Your 20s

10 Essential Money-Saving Tips for College Graduates originally appeared on usnews.com

Don’t Settle for Student Loans to Pay for Online Education

By WTOP Staff
Online college programs are becoming a more popular choice for prospective students, with one study finding that more than 6 million students enrolled in at least one online course in fall 2015. The popularity of these courses can be attributed in part to their flexibility with working adults' schedules, students' ability to progress more quickly through online programs and, oftentimes, cheaper tuition. [See 10 low-cost online bachelor's programs for out-of-state students.]Online degrees can be beneficial to many college students, but some studies have shown online learners complete their programs at lower rates than students at traditional brick-and-mortar campuses. Individuals with student loans but no degree comprise two-thirds of defaulted borrowers. Though these numbers are not encouraging, just like for traditional programs, there are ways to reduce how much you'll need to borrow for an online program to ensure you won't become one of these statistics. Don't just settle on borrowing student loans to cover the whole cost of your program and living expenses. Instead, start thinking about how to cut costs and cover your balance in different ways, such as the following. -- Grants and scholarships: Even though you are taking an online course, you can still apply and receive grants and scholarships. But your first step should be to complete the Free Application for Federal Student Aid, commonly referred to as the FAFSA, which will allow you to receive a Pell Grant if your expected family contribution is low enough. The EFC criteria and award amounts are adjusted annually, but the 2017-2018 academic year awards range from $606 to $5,920, which could significantly lower the amount you borrow annually. Your next step is to apply for scholarships. You can start by checking online scholarship search engines, such as the Salt Scholarship Search, College Board's BigFuture and Peterson's. But don't forget to take advantage of local organizations and your school's financial aid office. Both may offer scholarships that you can't find with a national scholarship search. [Review these 10 sites to kick off your scholarship search.]For instance, organizations like the Elks Club, Knights of Columbus or the Rotary Club typically offer scholarships annually to local students. Just because you're going to school online doesn't mean you're ineligible. Visit your local library for scholarship listings, and ask around town. You might be surprised how many local organizations offer scholarships. While these scholarships typically aren't large, every little bit counts. Each dollar you receive in a scholarship is a dollar you don't have to borrow and pay interest on. -- Work-study: Another option for online students may be work-study awards. Not all students enrolled in online programs are eligible, but students at some schools -- including, for example, SUNY Empire State College and Liberty University -- are. Work-study awards are not given upfront like scholarships and grants. In most cases, they are an offer to earn up to the awarded amount if you secure an eligible work-study job. While there is a misconception that all work-study jobs must be on campus, students can work for off-campus, nonprofit or public employers as long as the work is in the public's interest. You may be able to work for a for-profit employer if the job is relevant to your course of study. No matter who the outside employer is, it will need to have an established agreement with your college for you to receive work-study funds. Remember, to be eligible for federal financial aid, you must be enrolled and pursuing a degree or certificate. If you're not working toward a credential, Pell Grants and work-study won't be option, but you may still be able to take advantage of private scholarships -- just be sure to read the eligibility criteria carefully. [Explore what to know about financial aid in online programs.]-- Pay as you go: One of the great benefits to enrolling online is the flexible schedule, which can allow you to complete your college coursework around your responsibilities. But prospective students often overlook using their part- or full-time job earnings as an option for paying for college. Almost 80 percent of college students in 2015 worked at least part time while attending classes, according to the National Center for Education Statistics. By budgeting and thinking strategically about your college costs, you can likely reduce your dependence on student loans by paying a portion out of pocket. Many -- but not all -- online programs are less expensive than traditional programs and often have shorter payment periods. Six, eight or 10 weeks are common course durations. Because of the frequency of payments in an online setting, you may be well-placed to pay as you go and possibly avoid borrowing altogether. Attending college online and avoiding student loans may be challenging, but if you are willing to put in the effort, you can limit the amount you need to borrow. More from U.S. News Q&A: Understanding Student Loan Discharge Eligibility Student Loan Refinancing Isn't Right for All Borrowers
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